GUATEMALA CRAFT SECTOR EXPORT INITIATIVE SEMI-ANNUAL REPORT JANUARY 1 JUNE 30, 2005
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1 GUATEMALA CRAFT SECTOR EXPORT INITIATIVE SEMI-ANNUAL REPORT JANUARY 1 JUNE 30, 2005 Cooperative Agreement No.: GEG-A Date: August 15, 2005 Program Director, Americas: Michaela Brehm michaela_brehm@aidtoartisans.org Executive Coordinator, Craft Commission, AGEXPRONT: Silvia Moreira silvia.moreira@agexpront.org.gt Program Officer: Celina Lee celina_lee@aidtoartisans.org Aid to Artisans AGEXPRONT 331 Wethersfield Ave Asociación Gremial de Exportadores de Productos No Tradicionales Hartford, CT Avenida Zona 13, Guatemala, C.A T (860) T (502) / 96 F (860) F (502)
2 Guatemala Craft Sector Export Initiative Semi-Annual Report January 1 June 30, 2005 Table of Contents I. Executive Summary...1 Product Development Trips... 1 Trade Show Participation and Training... 2 Subsidized Product Design Consulting Services... 3 Buyer Visits, Importer Interest and Local Sales Efforts... 4 Library and Information Services, AGEXPRONT Capacity-Building, Sector Coordination and Information Sharing... 5 BDS Market Development Training... 6 Performance Assessment... 6 Key Activities for the Coming Period... 6 II. Progress on Performance Targets and Indicators...8 III. Implementation Issues...9 Expanding alternative markets... 9 Regional coordination... 9 Continuity of PD consultancies... 9 Engaging high end local designers IV. Progress on Learning Agenda Leveraging local junior designers Selected indicators, measuring benefit to artisans Developing role of AGEXPRONT as service provider Attachments A. Seema Krish s Design Consultancy Trip Report and Technical Product Sheets B. Product & Price Sheets, Spring 2005 C. Exporter Show Report, NYIGF Spring 2005 D. Article from AGEXPRONT magazine on NYIGF Spring 2005 E. Market Readiness Program Agenda, January 2005 F. Silvia Moreira CARHCO Trip Report G. ATA Importer Contact Update H. Buyer Visit Reports I. Aragon & Associates Final Qualitative Report with Focus Groups, April 2005
3 Guatemala Craft Sector Export Initiative Semi-Annual Report January 1 June 30, 2005 I. E x e c u t i v e S u m m a r y As of June 2005, The Guatemala Craft Sector Export Initiative (GCSEI) project (Cooperative Agreement #GEG-A ) is nearing its scheduled close, and is well-positioned to complete its project objectives and leave a lasting impact on the artisan sector in Guatemala. Originally slated to conclude in September 2005, ATA has been working with USAID to obtain a time and cost extension of $30,000 with a new project close date of February 2006 so as to better ensure the sustainability of the project outcomes through increased local and regional marketing and to enhance the time and monetary investment allocated to the final impact assessment of this project. Although ATA anticipates being granted this extension, to date it has not yet been officially approved. In this semester, the project continued its focus on cultivating international, regional and local market linkages, while implementing additional product development, local marketing, and training activities. As the project nears its scheduled close, AGEXPRONT, with its growing understanding of sector needs, has increasingly driven project priorities and continues to emerge as a key facilitating agency in sector growth. The main focus this semester was on developing the regional market linkages within Latin America, planning the first Guatemalan Design Congress which will act as a forum for sector coordination, market linkages and product design, and the second round of product development with this year s three exporters which began working with ATA last September. Throughout these activities, there has been a continued focus on developing local design talent and facilitating relationships within the artisan sector, which will build the foundation necessary for the continuation of the current activities and assist in the sector s growth after this project comes to a close. Product Development Trips Textile expert and Director of Design at the Robert Allen Group in Boston, Seema Krish visited Guatemala as an international design consultant from February 20 to March 4, With this consultancy, Ms. Krish completed the second of the two product developments (Spring and Fall product lines) that all exporters who work with the GCSEI project complete during their year long commitment to participating in the program. Ms. Krish thus worked on developing product lines to be presented at the Fall New York International Gift Fair (NYIGF) to be held in August; she worked with the three export/production companies with whom international designer Patti Carpenter completed her product development consultancy last semester in preparation for the Spring NYIGF held in January: Modiane, Aj Quen and De Colores. International designer Seema Krish mentored three junior designers, including Jorge Lopez who While all three groups produce and market textiles, their assisted her in developing products for exporter De product offerings and techniques are notably different, Colores January 1 June 30, Aid to Artisans 1
4 allowing for unique collections. This being the second and final round of product development for these groups, Ms. Krish built her designs on their existing product offerings. Ms. Krish worked with Modiane, a company which has targeted the fashion and fashion accessories market, to develop a higher end travel accessory and home tabletop collection. With Aj Quen, a non-profit representing approximately 750 producers in different locations, she developed a boutique home collection designed to appeal to the mass market. Ms. Krish worked with De Colores developing two collections: boutique accessories and a home collection, both geared towards the upper middle markets. During her trip, Ms. Krish primarily worked in the offices of each company rather than in the field with producer groups. In an effort to bridge the gap between the international consultant s design concepts and the actual production of the designs, three local design students- one per exporter group- assisted Ms. Krish throughout the product development process. In an effort to develop local design talent, one of Ms. Krish s tasks was to mentor these junior designers, who were later responsible for follow up regarding sample production and delivery to AGEXPRONT. The incorporation of local designers has also helped to facilitate market linkages within the Guatemalan artisan sector, as a number of these junior designers have continued to work with the exporters on an independent basis. During her visit, Ms. Krish also gave a two hour seminar to exporters, design students and other stakeholders in the craft sector relating to design and textiles; topics included market trends, product categories, pricing, etc. See Attachment A: Seema Krish s design consultancy trip report and technical product sheets. Trade Show Participation and Training In total, 15 artisan sector professionals from Guatemala participated in the NYIGF. The notably high level of Guatemalan participation in the New York International Gift Fair in February 2005 speaks well to the positive momentum generated by the GCSEI project in the Guatemalan craft sector. In addition to the products featured in the ATA booth, with products developed during the previous round of product development, four other exporters (La Cotzal, Casa de los Gigantes, El Puente, and Craft) collaborated to participate in the show together with their own independent booth. Though the independent booth was subsidized by the GCSEI project, this gave these groups the valuable experience of coordinating their participation, interacting first-hand with buyers in a US market setting, and further developing the tools and skills necessary to ensure future participation on their own. Sales from this show totaled US$43,460. ATA displayed products from Guatemala at the New York International Gift Fair See Attachment B: Product and Price Sheets from the Spring 2005 NYIGF, Attachment C: Exporter Show Reports for each of the three NYIGF participating exporters, and Attachment D: An article featured in the AGEXPRONT export magazine reporting the success and high level of Guatemalan participation in the NYIGF. January 1 June 30, Aid to Artisans 2
5 AGEXPRONT sent five participants to ATA s Market Readiness Program which is held in New York in conjunction with the NYIGF: the owners of the three companies who developed and presented their products through ATA, Amparo Mentiel of Modiane, Edgar Lopez of Aj Quen, Juan Jose Ventura of De Colores, as well as two local designers from the University of Rafael Landivar, Jorge Lopez and Oscar Arce. See Attachment E: The Spring 2005 MRP agenda. Executive Coordinator of AGEXPRONT s Craft Commission, Silvia Moreira accompanied the Guatemalan artisan-sector participants to the NYIGF, where she was also able to make contacts with a number of potential buyers who later traveled to Guatemala on buyer visit, including Carpenter and Campbell, One World, and Sherwood Forest Design. As mentioned, one of the important foci of this semester was on cultivating a stronger regional market for Guatemalan products, particularly in Central America. Two of the groups working with ATA, El Puente and Febles participated in the International Gift Fair in Mexico City, FIDAR, in January. The sales generated by this event, including follow up sales totaled $24,165. In June, Ms. Moreira and AGEXPRONT Craft Commission s Marketing Manager, Aida Fernanadez, attended a trade show sponsored by CARHCO (Central American Retail and Holding Company) in Tegulcigalpa, Honduras. The CARHCO cooperation consists of various chain stores and supermarkets throughout Central America. The fair offered a venue for buyers from these stores from various countries to view booths of product offerings from CARHCO providers and potential providers. They met with buyers representing supermarkets in El Salvador, Honduras, Nicaragua, and Costa Rica. Tentative plans are currently being developed for buyers from a number of these stores to visit Guatemala during the coming semester. See Attachment F: Silvia Moreira CARHCO trip report. The CARHCO trade show in Honduras provided an opportunity for AGEXPRONT to make connection with buyers representing stores throughout Central America Training objectives this semester focused on planning and arranging the logistics for the Design Congress to take place early next semester. However, during this semester, Ms. Moreira gave two 2- hour Market Readiness seminars to exporters (March 2 in the AGEXPRONT office and June 21 in the field in the western highlands area of the country). These seminars are based on the ATA weeklong MRP seminars held in New York twice a year with the NYIGF. Additionally, in May international designer Patti Carpenter, who did a consultancy with this project last semester, gave a training seminar on industry trends to exporters, local designers, and NGOs. Subsidized Product Design Consulting Services Local designers played a critical role during the recent international product design activities led by international design consultant, Seema Krish. Local designers Jorge López, María Teresa Estrada and Gloria Escobar accompanied Ms. Krish throughout her visit, also participating in an initial January 1 June 30, Aid to Artisans 3
6 group workshop to cover expectations, design trends, and the general PD process, as well as an endof-trip debriefing and summary to set Ms. Krish s and the exporters expectations going forward. A partnership between AGEXPRONT and Universidad Rafael Landivar was initiated in April 2004 allowing students to gain valuable practical experience by working with the international designers and at the same time play an important role in the product development process. All three of these designers participation was facilitated by this agreement with the university and proved to be critical in maintaining the communication between the project and the artisan groups and carrying the product development process through to production of the samples sent to ATA for the Fall NYIGF. Buyer Visits, Importer Interest and Local Sales Efforts During this period, support from the GCSEI project led to a sales total of US$82,719; of this, US and European buyer purchases (including ATA sales written at international trade shows) comprised US$49,084 while local market sales totaled US$33,635. See Attachment G: ATA Importer Contact Update. As part of an ongoing effort to establish sustainable market links, international buyer visits continued, with visits from Oxfam Australia, Cap Logistic, and ARTESAL as well as the three importers who Ms. Moreira met with during the NYIGF in January, Patti Carpenter (who has worked with ATA as a design consultant) of Carpenter and Campbell, Phil Smith of One World, and Soli Pierce of Sherwood Forest Design. See Attachment H: Buyer Visit Reports. The Paiz grocery store chain hosts El Orgullo de Ser Chapin, another opportunity for GCSEI groups to sell their products nationally Additional export orders included those from Frog Light, Charity USA, Ten Thousand Villages, Artecnica, and the San Diego Zoo, plus orders imported by ATA s warehouse (totaling US$188) that occasionally acts as an importer to sell to retailers who are interested in the products but cannot meet the minimum orders. As part of an AGEXPRONT effort to focus activities on marketing, Ms. Moreira reallocated her efforts to increase her involvement in marketing implementation, particularly in the area of regional marketing. During their trip to the CARHCO fair in Honduras, Ms. Moreira and Ms. Fernandez also traveled to Costa Rica and El Salvador visiting with with potential buyers from regional chain department stores: Cemaco in Costa Rica and Siman in El Salvador. Cemaco has already selected the products to be offered at Guatemala Nuestra, a craft fair held in September La Fragua, who sponsored the CARHCO fair, owns the Guatemalan supermarket chains Paiz and HiperPaiz, whose stores throughout the country host the month-long craft fair sale called El Orgullo de Ser Chapin. This event took place during the month of May. AGEXPRONT played a critical role in connecting the buyers for this event with artisan groups and businesses. January 1 June 30, Aid to Artisans 4
7 The chain department store, Cemaco hosts a similar event called Guatemala Nuestra, which will take place in September. They have already selected products to be sold with the assistance of ATA/AGEXPRONT and placed their orders in June. Library and Information Services, AGEXPRONT Capacity-Building, Sector Coordination and Information Sharing A major component of the GCSEI project and a key to the sustainability of its results is the development of AGEXPRONT s capacity as an NGO and a coordinator in the Guatemalan artisan sector. Sector coordination involves facilitating the sharing of information between the various artisan sector stakeholders, which AGEXPRONT has continued to do during this semester. The project purchased materials for the AGEXPRONT Craft Commission library that is open to local and visiting designers, producers, exporters, and other members of the Guatemalan craft sector. These materials will serve as important informational resources and include the following magazines: Gifts & Decorative, Casa y Estilo, LDB, Metropolitan Home, House & Garden, Elle Decor, Interior Design, The English Home. In addition, a Pantone Color Swatch book was also purchased and added to the library. Upon designer Seema Krish s recommendation, the AGEXPRONT Craft Commission compiled a color library of thread used in textiles, which will act as a reference to designers working with Guatemalan weavers as well as a useful tool for artisans looking to work with new colors and learn from others expertise. AGEXPRONT also worked with the Guatemalan National Institute of Forested Areas, Instituto Nacional de Areas de Bosque (INAB), to establish a formal process for artisans to register the wood they use in their crafts. This measure addresses some of the complications that wood-working artisans have encountered when exporting products, by officially identifying their materials as legally exportable. In April 2005, AGEXPRONT met with USAID s Ms. Glenda de Paiz, Ms. Lilián Monterroso and Ms. Teresa Robles to orient them to the ATA/AGEXPRONT GCSEI project. This meeting was meant to raise awareness within the local USAID mission on the successes of this project. Marketing Manager Aida Fernandez attended the ATA Marketing Summit where she gave a presentation on the GCSEI project. At the summit, she had the opportunity to work with the marketing managers from the other ATA projects as well as the Home Office marketing staff to share experiences and to define and review organization-wide marketing strategies. In April, AGEXPRONT s Craft Commission hired local designer Jorge Lopez as a full-time employee. Mr. Lopez had originally worked with the GCSEI project as a junior designer, assisting international designers Patti Carpenter and Ms. Krish during the last two product development cycles. AGEXPRONT continued to facilitate key project activities and is increasingly offering direct services to the exporters it serves. In turn, exporters and buyers alike are recognizing both the value of these services and AGEXPRONT s ability to deliver them as a critical part of accessing and successfully competing in the international market. This period saw the January 1 June 30, Aid to Artisans 5
8 continued success of the 2.5% commission that AGEXPRONT charges for all export sales that they coordinate and consolidate. BDS Market Development Training ATA staff continues to develop its capacity in the field of BDS by participating in workshops and training seminars. With this additional education in BDS, staff is better positioned to support the GCSEI project, both in implementation of program activities as well as in program evaluation. ATA Program Officer to the GCSEI project Celina Lee attended a week-long course on Market Research Tools and Techniques for BDS and Program Design held at the Microenterprise and Development Institute at Southern New Hampshire University in June. This course, whose participants included international development practitioners from around the world, covered how to use market research to design a BDS program. As a continuation to the BDS conference Ms. Moreira attended in December 2003 in India, ATA Program Director Mary Cockram attended the IGP Learning Network conference in South Africa, sponsored by USAID in March for leaders of projects funded through USAID s IGP Learning Network such as GCSEI. The conference offered participants the opportunity to share their experiences and knowledge, as well as learn about new methodologies and information in the field of BDS Market Development. Performance Assessment Aragon & Associates presented its final report from the craft sector focus groups and workshops held in March 2004, which highlighted the varying perspectives of the market players, as well as the constraints they perceive in further sector development. This includes an annex to the first draft of the report originally submitted in December; the annex includes the information on artisan producers that was missing from the original draft. See Attachment I: Aragon & Associates Final Qualitative Report with Focus Groups, April Upon the recommendation of the USAID Micro Enterprise office, ATA began revising the original work plan for implementing the final impact assessment, incorporating oversight by US-based M&E consultant Lucy Creevey, and management by local M&E consultant Lorena Pastor. Key Activities for the Coming Period Guatemalan Design Congress scheduled for July. This artisan sector event will focus on product innovation and design and will provide a forum for discussion between the various stakeholders in the sector. International and local designers as well as exporters, NGOs and governmental officials are anticipated to participate. Product Development. Products and groups will be selected according to results of the product development workshops held during the Design Congress. Fall New York International Gift Fair, August 2005 Coordinate and receive buyer visits from La Fragua, Cemaco, Siman to choose products for next year s craft expositions Buyer trips. These will include buyer visits from contacts made at the CARHCO fair in Honduras with companies throughout Central America. January 1 June 30, Aid to Artisans 6
9 Begin Final Impact Assessment with Aragon & Associates and expert consultants, tentatively slated to begin in November Follow up on and fulfill orders placed for the Guatemala Nuestra show to be held in September. Begin project close out by concluding program activities and planning with exporters who have participated in the program strategies for sustaining business relationships and sales after the close of the project Begin planning and pursuing funding opportunities with the local USAID mission and other international funders to continue craft development activities in Guatemala Obtain official project extension to February 2006 with $30,000 January 1 June 30, Aid to Artisans 7
10 I I. P r o g r e s s o n P e r f o r m a n c e T a r g e t s a n d I n d i c a t o r s Table 1, below, summarizes the progress of the GCSEI with respect to pre-established performance indicators. January 1 June 30, Aid to Artisans 8
11 I I I. I m p l e m e n t a t i o n I s s u e s Expanding alternative markets While the GCSEI project has had success with the export markets in terms of sales, as well as strengthening the market linkages between Guatemalan exporters and European and US-based importers, ATA and AGEXPRONT recognize the value of assisting in the development of relationships with buyers within Guatemala and Latin America. For the smaller exporters who do not yet possess the capacity to export to the US or Europe, focusing on local and regional markets is a viable and more sustainable option for expanding their sales and growing their businesses. As the project begins to close and thus remove itself from the Guatemalan artisan sector, ATA must focus on strengthening the market linkages that have the highest likelihood of self-sustaining long after the project s close. For this reason the project will spend a large part of the last semester developing local and regional export markets. Regional coordination The success of regional-level marketing activities in Central America in many ways has been facilitated by ATA s presence in neighboring Latin American countries such as El Salvador, Mexico and Colombia. From participating in Mexico s FIDAR trade show and La Fragua s CARHCO fair in Honduras to visiting El Salvador and Costa Rica to make connections with some of Central America s largest chain stores, AGEXPRONT has been actively developing and strengthening the regional market networks. These initiatives have leveraged the other Latin American ATA projects connections and relationships, enhanced familiarity with the craft sector and marketing landscape of the other countries, and increased awareness of the major market players and opportunities. As other ATA projects in Latin America, the GCSEI project may find itself with less opportunities and resources to leverage in strengthening regional marketing efforts. Likewise, when this project closes, other ATA projects in Latin America may also lose some of their regional marketing momentum. To better prepare for these future challenges and fully leverage the opportunities presented by regional coordination, ATA hopes to have the opportunity in the future to explore more fully the possibilities of regional coordination and the development of a regional craft marketing initiative for Latin America. Continuity of PD consultancies This project was designed to focus its interventions primarily on the exporters and enterprises level rather than on that of the individual artisans, and because of the limited intervention as defined by the scope of the GCSEI project, which allows AGEXPRONT to work with each exporter for just two cycles of product development consultancies, ATA has experienced some challenges in creating continuity in the product development process. The international designers work primarily in an office with exporters during their consultancies and thus often feel disconnected with the actual producers and the production process. The translation of the designers product concepts as developed in an office with the exporters to the actual production of the samples in the field by artisans as guided by the exporter is not a very fluid or exacting process. International design consultants have voiced frustration with the discontinuity of this process. This challenge has been addressed by hiring junior level local designers who can commit more time with both the international designer and the artisans and who thus acts as a bridge in this process. January 1 June 30, Aid to Artisans 9
12 Local designers accompany the international designer during the consultancy and are responsible for working with and following up with the exporter and related producer groups as they prepare the samples developed during the consultancy. This not only increases the likelihood of accurate sample production, but also offers theses new designers practical experience in the field and the opportunity to work with and learn from more experienced international designers. Engaging high end local designers One of the goals of the GCSEI project is to strengthen the relationships between local design talent and exporters and artisans. This has proved challenging, as the project has experienced difficulty engaging high end local designers to work with GCSEI groups and projects. This disinterest stems from the fact that many of theses designers own their own businesses and generally command a high salary. As a result they often do not have the time or financial motivation to work with other smaller projects and craft sector groups. ATA/AGEXPRONT addresses this problem by leveraging junior local designers, who are more willing to work with the GCSEI exporters and can offer much needed design services at moderate prices. AGEXPRONT has successfully cultivated relationships with local design students and recent graduates through an arrangement with Universidad Rafael Landivar which has a strong industrial design program. In order to engage high end local designers, the project is planning to host a Design Congress, early next semester. It is anticipated that the local designers will be motivated to participate in the Congress due to several factors, including the presence of many well known international designers, and the possibility of being involved with and hired to develop the products designed during the congress, the production of which will be funded by AGEXPRONT/USAID. Unaddressed production issues An aspect of the craft sector that has not been extensively addressed during this project is the issue of production, including activities and training to develop production techniques that allow for consistent quality, production efficiency that ensures competitive price points, and new techniques that help meet market demand. Though there is an expressed need among producers to address these issues, budget and time constraints made it impossible to sufficiently address production issues within the scope of this project. However, this may be an interesting topic to pursue and develop in the future. I V. P r o g r e s s o n L e a r n i n g A g e n d a Leveraging local junior designers Hiring local junior designers to assist the international design consultants and the artisan groups to produce the product samples has been successful in creating continuity in the process, enabling logistical follow up with artisans as necessary and ensuring timely completion of samples. In addition, this model promotes the creation of sustainable market linkages while strengthening the sector s local talent, as these junior designers are now occasionally hired by export companies for product development services. Selected indicators, measuring benefit to artisans January 1 June 30, Aid to Artisans 10
13 Because the model for this project is one in which the point of intervention focuses on the export enterprise level of the value chain, the indicators that refer to the artisans benefited and their gender, information that is obtained through the export enterprises, may lack consistency and are possibly inaccurate depending on what level of impact actually constitutes benefit. Most export enterprises do not differentiate between the different levels of involvement they have with their artisan members and thus the level of assistance provided to them as a part of the GCSEI project is not differentiated either. As a result, the indicators count both those artisans who benefit directly, through product design and other training, with those who benefit indirectly through association with a group whose leaders have received training or other support. Reporting indicators in this lump-sum manner leads to indicators that do not necessarily reflect the full story of ATA s impact on the artisan sector. For this reason, the qualitative impact assessments conducted throughout this project and the final impact assessment will be critical to understanding the true effects the GCSEI project has had. Developing role of AGEXPRONT as service provider As noted in past reports, AGEXPRONT s role in the Guatemalan export sector is evolving towards that of a market-driven service provider. This project has given the AGEXPRONT team the opportunity to build their capacity as marketing professionals within the artisan sector. AGEXPRONT now provides services that have recognized market value, as demonstrated by the local market s demand for their commission-based services. AGEXPRONT is emerging in the sector as a BDS provider and has begun to integrate itself into the value chain through its marketing and other market-driven activities. A t t a c h m e n t s A. Seema Krish s Design Consultancy Trip Report and Technical Product Sheets B. Product & Price Sheets, Spring 2005 C. Exporter Show Report, NYIGF Spring 2005 D. Article from AGEXPRONT magazine on NYIGF Spring 2005 E. Market Readiness Program Agenda, January 2005 F. Silvia Moreira CARHCO Trip Report G. ATA Importer Contact Update H. Buyer Visit Reports I. Aragon & Associates Final Qualitative Report with Focus Groups, April 2005 January 1 June 30, Aid to Artisans 11
GUATEMALA CRAFT SECTOR EXPORT INITIATIVE SEMI-ANNUAL REPORT JULY 1 DECEMBER 31, 2004
GUATEMALA CRAFT SECTOR EXPORT INITIATIVE SEMI-ANNUAL REPORT JULY 1 DECEMBER 31, 2004 Cooperative Agreement No.: GEG-A-002-00008-00 Date: February 15, 2005 Program Director, Americas: Lane Pollack lane_pollack@aidtoartisans.org
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